Brief Exercise 10-3 (Static) Lump-sum acquisition [LO10-2] Falcon Waste Management purchased land and a warehouse for $600,000. In addition to the purchase price, Falcon made the following expenditures related to the acquisition: broker's commission, $30,000; title insurance, $3,000; miscellaneous closing costs, $6,000. Assume that Falcon decides to use the warehouse rather than demolish it. An independent appraisal estimates the fair values of the land and warehouse at $420,000 and $280,000, respectively. Determine the amounts Falcon should capitalize as the cost of the land and the building. Capitalized cost of land Capitalized cost of building
Brief Exercise 10-3 (Static) Lump-sum acquisition [LO10-2] Falcon Waste Management purchased land and a warehouse for $600,000. In addition to the purchase price, Falcon made the following expenditures related to the acquisition: broker's commission, $30,000; title insurance, $3,000; miscellaneous closing costs, $6,000. Assume that Falcon decides to use the warehouse rather than demolish it. An independent appraisal estimates the fair values of the land and warehouse at $420,000 and $280,000, respectively. Determine the amounts Falcon should capitalize as the cost of the land and the building. Capitalized cost of land Capitalized cost of building
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![Brief Exercise 10-3 (Static) Lump-sum acquisition [LO10-2]
Falcon Waste Management purchased land and a warehouse for $600,000. In addition to the purchase price, Falcon made the
following expenditures related to the acquisition; broker's commission, $30,000; title insurance, $3,000; miscellaneous closing
costs, $6,000. Assume that Falcon decides to use the warehouse rather than demolish it. An independent appraisal estimates the
fair values of the land and warehouse at $420,000 and $280,000, respectively.
Determine the amounts Falcon should capitalize as the cost of the land and the building.
Capitalized cost of land
Capitalized cost of building](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F5d9d8f4e-55ce-4d3c-80c2-ad2a804bc95e%2F503266de-87dd-48ae-a73f-6782272e4377%2Fikzu3s_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Brief Exercise 10-3 (Static) Lump-sum acquisition [LO10-2]
Falcon Waste Management purchased land and a warehouse for $600,000. In addition to the purchase price, Falcon made the
following expenditures related to the acquisition; broker's commission, $30,000; title insurance, $3,000; miscellaneous closing
costs, $6,000. Assume that Falcon decides to use the warehouse rather than demolish it. An independent appraisal estimates the
fair values of the land and warehouse at $420,000 and $280,000, respectively.
Determine the amounts Falcon should capitalize as the cost of the land and the building.
Capitalized cost of land
Capitalized cost of building
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